The value of bitcoin has fallen
below $200 (£131) for the first time since 2013 as the
cryptocurrency continues to slump. Since the start of the year
bitcoin has lost nearly 40 percent of its value, having started
2015 at around $313 (£206).
In December 2013 bitcoin hit a record high of $1,200
(£715, at that time) but has since steadily fallen. The
latest slump in price is more dramatic, with bitcoin tanking in the
past week. The sharp drop could have major implications for the
large and costly mines that underpin bitcoin. At the time of
publication bitcoin was valued at
$188.
Earlier this week bitcoin exchange CEX.IO announced a temporary suspension of its cloud mining
service. The company said the cost of mining had exceeded profits
and mining would only begin again when it was profitable again. If
the price continues to fall, more bitcoin mines may be forced to
close.
As bitcoin's value is tied to how difficult it is to
produce, the currency could be reaching a tipping point. If bitcoin
mining continues to be unprofitable then it is likely bitcoin will
adjust to make mining easier, with big fluctuations in value the
likely result.
Don't
miss
With the majority of bitcoin trades taking place in
either US dollars of Chinese yuan, the cryptocurrency's value in
those two currencies is seen as a key indicator. Bitcoin is
currently worth just over ¥1,100 (£116) in
China having hit ¥994 (£105) earlier on
Wednesday.
Amadeo Pellicce, chief operating officer and co-founder of
UK-based bitcoin exchange Coinfloor said that in recent weeks there
had been "more supply than demand", which had caused bitcoin's
value to fall. He said that large sell-offs by mining companies and
other bitcoin holders were also factors.
"As with any commodity, bitcoin is only worth what people are
willing to pay for it at any given time," Pellicce added. "The
fundamentals of the six-year-old currency are stronger today than
they have ever been and we think we are going to continue to see
many interesting developments in 2015."
Source Article from http://www.wired.co.uk/news/archive/2015-01/14/bitcoin-value-plummets http://cdni.wired.co.uk/620x413/a_c/bitcoin_14.jpg
Bitcoin value plummets below $200
No comments:
Post a Comment